GM REVS MOTOR FOR LIFE AFTER SMALE

John Smale instilled a rare marketing focus into General Motors Corp. during his three years as non-executive chairman. Now, the question is whether the GM culture change can sustain itself after the ex-Procter & Gamble Co. chairman steps aside Jan. 1.

"Smale was interested in changing the system, and by now the senior executives are converts to his way of thinking," said Jay Houghton, senior analyst with Automotive Marketing Consultants, Warren, Mich. "But change needs to continue at the middle-management level, where implementation and tactical decisions are made."

Taking over as GM chairman is John F. "Jack" Smith Jr., who will remain president-CEO. Mr. Smale, 68, will stay on as a director and will become chairman of a new executive committee that will serve as a watchdog on GM management.

Messrs. Smale and Smith assumed their positions in November 1992 in a boardroom revolt that forced out Chairman-CEO Robert Stempel as the automaker's financial losses mounted. GM is back in the black, earning $4.9 billion last year, and Mr. Smale said in a statement that "it's clear that GM's management team under Jack Smith's leadership has turned GM around."

Although he kept a low profile, Mr. Smale spurred GM toward a greater emphasis on consumer research and on developing stronger brand identities. Among the results: a cross-divisional effort to make regional advertising more consistent with national messages; going outside the company to hire Ronald Zarrella, the president-chief operating officer of Bausch & Lomb Corp., for GM's top marketing post; and the establishment as of next January of a brand management system with a single executive managing all marketing for individual models.

Mr. Houghton said one indicator of whether real change will continue at GM is whether the company's managers are willing to take necessary risks.